ZerotoBillion

The Time to Buy is Here and Now

The past six months have been pretty tough for the Indian markets. Everything which was going right, did go wrong and some more. It’s one of those times when everything which you believe to be true, turn out to be false. India, which was going uphill as the worlds’ fastest economy took a pause, the Industrial growth slowed; inflation went up and corporate earnings dropped. Indian market which looked cheap at 26200 are suddenly too expensive at 22800, size months later.

So what are we seeing here.

First of all, some myth busting times. A lot of the gurus on TV and X are incessantly telling us that we retailers who came during or after Covid haven’t seen any fall and thus, are inherently prone to a downside risk. Well, people have short memories in the markets. The Nifty which peaked out at 18000 in October 2021 gave absolute Zero return for two years, until it took that point out again in September 2023. It fell all the way to 15800 and all the post Russia-Ukraine, Nasdaq meltdown, Crypto frauds, etc happened during that year. Well, that’s just 17 months ago.

Second, people are crying over the fact that the equity will give negative returns and how the SIPs will turn out to be a dud, etc. In summary, Indian markets are up just around 90% in 5 years, which is from just before Covid to now. So, it’s not that we have had some 40% CAGR for five years and the markets have gone to bubble territories, etc.

Thirdly, a lot of this S Naren kind guys have been crying about valuations being too high for more than two years. The wolf will eventually come one day and then they claim to have prophesied the fall. It’s kind of nonsensical to keep predicting every year that the markets will fall and of course, in one or the other year, they do fall. This is nothing but rabble-rousing to popularise your asset allocation mutual fund product.

Let me put this straight. A retailer is here to first make some money. He does not even have assets to put in an asset allocation fund. This all financial planning nonsense which is being served by influencers and mutual fund touts telling us to buy gold and real estate and FD and equity and how to allocate x% to Large caps, Y % to mid caps is pure bullshit. You are telling this to a guy in his 30s who is only trying to put 10-20k in markets to buy gold? I mean, will he buy 2gm gold with that? And will he buy handle of a door of a flat with 20k? How do we even allow such gobbledegook in the name of investor awareness.

Asset allocation is right but only for someone who has at least a million dollars to allocate. For everybody else trying to make some money of their hard earned savings, the only thing which works is equity. It has the highest liquidity, maximum transparency, lowest cost and taxation and above average returns. You don’t trust me? Try buying a plot of land or a bar of Silver and show me the contract note you received on your email. Oh you didn’t receive it. Yes, that’s the point.

So the first thing you must do is to remember that we are in the biggest wealth creation two-decade period this country is going to witness in the next 50 years. We will go from 3 to at least 12 Trillion Dollars, even at the slowest possible growth rates and the absolute amount of money that will be made will be stupendous. So the only thing you’ve to do is to remain in appreciating assets- Equity, Either through buying good quality stocks directly or through equity only mutual funds. No bonds, no asset allocation nonsense until you’re above a Million Dollars.

One more thing which Im sure the folks are wrong are regarding the small and mid-cap universe. They’re such hated these days that nobody wants to even touch them by a one meter pole. And friends, the first rule of investing is to buy what’s hated. And buy when there’s blood on the street and right now, there’s a huge spillover around.

I generally avoid predictions because it’s a fool’s errand but Id assume that the excessive selling has taken every last ounce of froth out of anything and everything. Any stock which could have fallen has fallen; anything which was expensive is not anymore; anybody wanted to dump $10B in a stock has done that. So the only thing left is for the markets is to go up.

Id take you to one more myth. When the markets hit 13K in January 2022; it fell around 10% so sharp that the bets were off. We forget such moves because we are being told they never happened. And then the rally to 18K happened in six months period. Please remember, the markets will fall 15-20% every year or two and these people who ask you to buy at 26k will beg of you to sell at 22k. They’re in the game of stock entertainment and commissions, you are here to make wealth and change your life.

Don’t even think of getting off the boat; it might have already sailed ahead!

Disclaimer- The views expressed in this blog are personal opinions and are shared for educational and informational purposes only. They should not be considered as financial, investment, or legal advice. I write primarily to document my own learning and thinking process. I am not a SEBI-registered investment adviser, research analyst, or financial influencer, and no part of this blog should be seen as a recommendation to buy, sell, or hold any security. Please do your own research or consult a qualified professional before making any financial decisions.

A Clarion Buy Call

What a week it was! Everything just went down and out and then some more. Mid and small cap index lost close to 10% in a week isn’t a joke. Everybody who manages public money is running over each other to come on TV and say that they were the ones who spotted froth in the mid and small caps and that they were smart enough to allocate to only large caps.

There is a line to claim who went to cash the earliest and how they’re the smartest fund manager and anyone who was still invested is a novice; someone who hasn’t seen a market cycle and how only someone who is touting asset allocation and has been here for 30 years is the true guru and so on and so forth.

The amount of pessimism is unbelievable. Ive been in the market for close to 7 plus years and except Covid, I don’t recollect any time when the pessimism was so stark. The difference is that there isn’t an obvious reason to attribute for the fall and the relentless selling by FII and now even by HNIs is strangely without a visible backing. In 2022, it was Russia-Ukraine, or the rise in yields in the US; in 2018, it was the LTCG or the loss of some election by the BJP. Here, there is none.

Everybody is unanimous in believing that the market can and will go down but everyone is still looking for a way to intellectualise this opinion. I mean, if India was expensive, then it is less expensive now; if our growth was slowing down, RBI has infused a lot of liquidity and cut rates and also the CPI number was lower than expectations; if the earnings were terrible for September quarter, they are less bad in December and so on and so forth.

So the point is that there is no one reason on which everyone can unanimously agree to blame for the crackdown in portfolios.

What am I seeing here!

I was and until am a believer in psychology of the markets. I claim no special insights into prediction the tops or the bottoms but I believe in cycles of the markets. I also am a strong believer in the inherent growth of India and still believe that the bull run which started during the depths of Covid in March 2020 has a lot of legs to run. That market saw us go from 7500 to 18000 Nifty in October 2021 to a drop of close to 15% to around 15k and from there to 26k nifty in September 2024 to now around 23k nifty. A mere 3x in 5 years isn’t a mega bull run, especially if you take it on a five year just before Covid low basis, index has only gone from 12k in February 2020 to only a double now.

I was getting a lot nervous in late December when my stocks were going up pretty rapidly and was wondering whether a top was being made. The top, however, is not even close.

Friends, tops are made when everyone is bullish and has made a lot of money; when you are not thinking of nifty going to 20k but betting your house on it going to 50k; when the worst stock of your portfolio is up 20% in a week and you’ve made 5-10x on stocks you don’t know much about. Its counterintuitive but the top is made when there is no seller left in the market and everyone simply want to buy. That’s when the final hurrah is made and the stocks can’t go up anymore.

Similarly, the bottom is made when there is no buyer and everyone only wants to sell and run away.

This is what I am seeing right now. We have gone down sufficiently for any or all froth to vanish and one thing which all of us can agree is that there is no pockets in the market where there is any kind of froth is left- F&O trading frenzy has died; PSU- defence and railways are mostly down 35-65%; so are EMS, PLI type or even capital market stocks. TaMo is down 45% and RIL, HDFC Bank and Nestle have given zero returns for 3 years. So what else do you want now!

As the next week unfolds, we might see further downside or markets can go up, who knows. What I know for certain is that when there is blood on the street, you go out and buy and baby there’s an absolute carnage on the street. Everyone is certain that all rallies will be sold into and whenever there is a bounce, the markets will fall down to even lower levels and all starts on the upside are false. Only until when they aren’t and then the rally which will start will be so ferocious that people won’t even believe that their portfolios have doubled in no time. I was extremely scared till today first half but the way the bloodbath continued, it made me remember the days of April 2020 when I went all in while the smart people still predicted nifty at 6000 in June 2020. Well, it never happened.

I don’t know if the markets will stop going down. All I know is that if it does, you’ve to turn even more bullish and if market falls another 10%, start putting every penny you have in stocks. This is a clarion call to buy, buy and buy. Your friends and neighbours are now running around to buy gold; it’s time to buy stocks like there’s no tomorrow.

The next phase of this bull market will take us to places we can’t even imagine. The amount of wealth which will be made will make the believers rich beyond belief and I am sure we will look back at February 2025 as the time to buy when we got scared and sold out.

The Point of Capitulation

I was writing this in my journal yesterday that the point of capitulation was either yesterday or very near. And I believe we have just hit that point in morning trades of today. Market sold off massively from the word go and all bottoms fell off in the small and mid cap before a sharp recovery pulled certain stocks way back in green in the second half.

What I mean by the title is that when markets fall significantly and relentlessly; when no logical explanations to describe the carnage sounds reasonable; when all buying the dips fail and the entire world is shit scared to take the name of the word Stocks/Equity; that is the exact point when major bottoms are made.

So imagine this scenario- S Naren of the ICICI MF went around the town dissing the SIPs in not just Small and Mid caps but in equity itself; fear was being spread that the SIP Sahi nahi hai and you’re going to lose all your money in SIP to a public which has just put in 26000 crore plus in January 2025 through SIPs! Imagine the BCCI stopping kids from playing cricket.

Ive had a thumb-rule to predict the market. When the Hindi newspaper Dainik Bhaskar puts the fall in Sensex on its front page, it’s the bottom or we are almost there. What I mean by this is when a general newspaper not interested in stock markets to sell itself wants to tell its readers who are not the regular consumer of financial news that there is panic in the markets, the panic has basically hit the roof.

So that aside; here is my views on the markets:

India is undergoing a massive shift from being an also ran economy to a major first world type economy with extreme pockets of wealth driving the opulent and luxury consumption through the roof while the aspiring middle class will try to a- imitate the rich by buying better goods and services and also thanks to the structural shift in savings behaviour, will put a larger portion of their disposable savings into market linked products- MF, Direct Stocks, Insurance, etc.

Ive also learnt a few things in my journey of now seven plus years of investing that an individual investor is inherently advantaged against a fund manager trying to beat an index due to sheer compliance issues and as well as compulsion to mirror/beat an artificial index. So an individual investor can very well buy one or two good stocks and compound at superlative rates and beat the pants off anyone else in the markets.

Also, and this is entirely my opinion that you have to have larger stakes in what you own. You can hardly follow 10 companies in detail and are best suited to hold less than 10 stocks at a time with good concentration in each one of them to allow yourself to move higher up the value chain, as the stocks do well. It makes no sense to have 20 shares of a stock which went up 20x.

So Ive been pretty heavy in concentrating my portfolio as you’ve read all this while and Im also trying to examine what my style actually is. So for me, the most important thing is to buy and hold really profitable businesses with simple operations, zero to near zero debt, high dividend payouts and good margins. This sound pretty easy, isn’t it.

Now look around and count the fanciest stocks which have ruled the roost in the last two years- Dixon, Kaynes, Zomato, Waree, RAdico Khaitan, Ethos, ManKind, PB Fintech, etc. Add to this the railway and defence PSU and some metal stocks. I owned none of them. Not a single share.

And how have I performed? Well, my portfolio was up 100% in CY 2024 and 120% in CY 2023; zero % in 2022 and close to 100% in CY 2021. How’s that for a simple idea.

The logic is simple. One stock can and will change your life. For me, it was BSE. Now some of you will argue what’s so great about owning a stock which went up 30x since Covid bottom? The patience to hold and not selling your winners when it fell over 60% during Covid, 60% again in 2022 and over 35% in 2024 isn’t that simple, is it? That’s the boring job of looking at the stock through the eyes of an owner and feeling that you partly own a business that’s doing well and stock price will eventually recover as long as the business does well.

Now a lot of my friends ask me what exactly a full time investor does when you only trade once every few weeks, if not less than once a month? The simple answer is that to allow your businesses to grow requires patience and the time at hand is utilised to simply learn through reading.

So right now, as the blood on the street is pretty warm, here is what I am trying to do over the next few years, hopefully:

I would love to own any business which fulfils the above criterion of either catering to India’s luxury consumption or financialisation theme. I would, however, not own them unless the price is at a range wherein I can at least hope for a 2-3x in 3 years or less. Anything which has run up a lot or is too pricey is a big no. Plus, anything which doesn’t payout good dividends is a no. The idea is simple- if Im putting my funds in a stock for two-three years and I generally don’t book profits, dividends is a way to generate some real cashflow. Also, it’s the only way to examine the truthfulness of a company’s financials. If the EPS is real, dividends will flow.

So currently, among all the financials, I am most bullish on the AMC stocks. They have got zero returns for the past 5+ years while their PAT have gone up close to 2-2.5x. This means the P/E has contracted substantially and is in a zone where earnings are going up 25-30% Yo-Y with rising dividends ( NAM and HDFC AMC trade at 2.5-4% yield currently), even the slightest re-rating will result in the stocks going up 2-3x in a short span of time.

Will this mean that I will miss a lot of Dixons, Bajaj Finance, Page or other multi-baggers? YES! Totally. The key, however, is to think like a businessman. If only one of your stock does well, you will be a very wealthy person in 10-15 years. So why try to buy 50 stocks and act like a fund manager. Remember, you are here to generate wealth, not to beat an index!

Life of a Concentrated Investor

My investing journey began over seven years ago with some stocks picked by my father for me and what a journey it has been. From zero to here over seven years, it’s been a phenomenal run. Ive had my fair share of ups and downs but over time I have become what in investing parleys is known as a concentrated investor.

I own only seven stocks- eight if you believe Jio Finance and RIL are two separate companies and the top stock is well over 70% of my portfolio. Well, if you ask any investing expert, he will say my portfolio is extremely risky and Ive absolutely no idea what I am doing and I should sell part of it and rebalance it and make it more diversified to reduce risk. I have a different opinion to that.

When you see it from the point of view of a professional fund manager, a typical fund scheme has 50-60 and even more stocks with weightage mirroring or at least hugging the benchmark index. If lets say a fund has Nifty 50 as benchmark, it will generally have more or less all the stocks of nifty 50, give or take a few here and there. How it tries to beat the market, ie, to do better than the benchmark is by going overweight in a few stocks and underweight in others. So it Reliance has 9% weight in index, if it owns 5% Reliance, its called being underweight and vice versa in case it owns 12% Reliance. And then it comes on TV and justify oh we are overweight financials and underweight IT because the rate cycle is moving south or because Donald Trump has won the election and so on and so forth. They measure their performance by beating the benchmark. So if Nifty 50 is up 15% in a year and they are up 16%, they will celebrate and be feted as the man who has beaten the market and so on.

On the other hand, I as an individual investor is not in the game of beating an index or market for that matter. I am here to make money and to sustainably generate wealth for myself.And serious wealth is not made by owning everything the market has to offer today morning. It’s made by staying invested for long periods of time in businesses which compound their earnings and hence their share prices 10-5-100-1000 times.

So when I was beginning to get serious, I had 15-20 stocks with some stocks doing good and some doing worse. It was only in 2020, post covid when TaMo and BSE really took off. So in the process of natural selection, I was smart enough to not sell my winners and what eventually happened, as you can read my blogs beginning May 2021, I began a process of elimination. I sold my PSU stocks after making 2-3x my money and bought more and more BSE and TaMo and the like. I understood the power of quality, low debt, good yield and then I understood the concept of decadal themes and 100 bagger stocks. This is when I narrowed my theme to two simple iterations- growing consumption in India and financialisation of savings. And financialisation of savings would be led by non-lending stocks was my biggest learning.

That I was extremely bullish on BSE is an understatement. I also grew as an investor and began to average up and have bought BSE and others at all prices. My most recent purchase would be at 4500 BSE and 4700 AMC. So in the end, the results have been pretty staggering.

My portfolio is up 90% this year. Almost up 400% since bottom of March 2023 and is up 50% since Budget 2023. I also have seen drawdowns of over 5% a day, regularly since the largest stock is so heavily influencing that the entire portfolio is skewed.

So what am I trying to say here. I am making you see that I am having almost a VC like mentality when the biggest winners are funded in every round at higher valuations with almost unlimited runway and distant exits. There’s a reason why sequoia has been what it has been. It had such brilliant 10000 baggers that its returns are better than any other person.

So when you are running such a concentrated portfolio that your entire networth is directly proportional to one or two companies, then your behaviour and psychology goes through a paradigm shift. You start to think in terms of where the business will be in three-five years and not how the stock price has moved up or down because of what SEBI has done or what election results tell you. It is so much easier said than done. Your heart pumps and you begin to sweat looking at 10% drawdowns in two days because just 5 such occasions and you’ll be left with less than half of where you were just a few days ago. You begin to doubt yourself when out of nowhere the price tanks and you are being told by some technical analyst that it was overbought and fell from a resistance.

So the journey to make multi bagger returns only look good from the outside. Since you are so lonely in your belief that when the things go south, the world tells you that you were just lucky earlier and the time to pay for your sins are here. The wealth destruction is at times so brutal and so furious that you simply can’t react.

The returns are exceptional on the upside though. I have been blessed to have beaten every possible index over the past one, three or five year period. The vision for some of my stocks remain the same and I am sure that what I am trying to achieve in my life is a moonshot- zero-to-billion and it can’t be done by playing small.

My life as an individual investor is going to be very, very different than any of you because I am trying to be big enough to buy percentages in companies I own. Just like RJ bought 5% of Crisil or 5% of Titan and made his Billions. Every successful investor has made 95% of his wealth by owning huge quantities of less than 3 companies; everything else has been sidekicks

Weekend Musings- November 2024

Indian markets have finally made a semblance of a bottoming out formation with a massive short covering 500 points rally today. So what are we seeing

Over the past two months, with relentless FII selling, our markets have corrected just over 10%, technically entering the correction territory. What I’m seeing is that with a lot of froth being taken out and most large caps down close to 20% from their all time highs, markets are definitely a good place to be.
I certainly have remained an India Perma bull and in any case, in my humble opinion, we are in the middle of a multi year bull run and this is somewhere in the middle when we throw away the skeptics and move on to higher highs.
Psychologically, most people have been waiting for a correction and people don’t wait for such days in the middle of a bubble but in the skepticism phase. So going by the logic of market cycles, we are nowhere close to a top.
The FII selling, for whatever reason has made valuations a lot reasonable which means whatever the amount of cash our people had on the sides can now be deployed.
It has also proved the fact that in this bull market, most Individual investors have made a ton of money and every supposedly smart investor has not even come close. The dumb retailer has certainly been the best performers .

Further, it’s evident that our great experts have only been momentum chasers because they were very happy to buy whatever went up and then come on TV to intellectualise their purchases.
Now coming to what I feel is the undercurrent all about.
Just look at what’s happening to stocks which are within 5-10% of their ATH – Capital market plays which refuse to go down since the party has only begun. With low float and huge outperformance, these yesteryear’s small caps are now knocking on doors of the large cap indices and the funds have to buy them at higher prices, which Keeps the price afloat. What sustained fund buying from passive funds can do was best evident in case of FAANG and now Nvidia so this is just the beginning in many of our names like BSE type.

Also the last decade heroes are finally biting the dust one by one, with Asian paints being the newest of the lot. This only proves that their cycle was over at the peak of Covid and history always rhymes in market. This lot Will possibly give next to zero rerun in this decade and money, especially index money Will make an exit fast.

Anyone who wants to make money needs to remember that index investing doesn’t make any money unless you really stretch it out for five-seven years to average the volatility out. I’ve been extremely blessed to have owned BSE for six plus years now and it’s not even a question that it’ll at least be a triple from here in two-three years. Simply because the earnings Will compound massively. It did 345 crore PAT this year which is close to 1400 crore annualised! At current market cap, it’s just 45x almost trailing earnings growing at 25% Q-o-Q and 100% Y-o-Y. Even with all the regulations on F&O, just because of the sheer size of our market, it’ll do at least a Billion Dollars in Sales in three- four years . To give you a perspective, the Intercontinental Exchange which owns the NYSE does over 3.3Billion Dollars in a quarter. So the runway from here is massive. No doubt BSE Will be a $25 Billion company soon and maybe a $100Billion company in next ten fifteen years! The time to sell BSE is still 5 years away!

So to wrap things up, it’s an unbelievably good time to redeploy in the markets since every year we have this 10-15% drop when people say it’s getting all doomed but it never does. India continues to remain the fastest growing economy and we are getting incredibly rich as citizens. A lot of that money Will find it’s way in luxury spends and a part Will be financialised through stock market. That’s all the theme there is! Stay invested, stay bullish!

BSE- to the 🌙

What a run this stock has had over the past week- up well over 40%! It’s up over 80% in less than two months and of course, with the hype in media, we all know that it’s the most buzzing stock of the moment.

I have been a perma-Bull on the stock, not from yesterday but ever since I discovered it in 2018. So what is that I am now trying to convey which I have not yet said multiple times over.

First of all, this is a loud scream to say that it’s the biggest stock since the Covid lows, up over 44x from the now adjusted price of Rs. 75.

So today I am trying to gauge what’s lying ahead of us and how the market will play out the FOMO in the stock.

BSE, as I have said earlier is on track to do well over a 1000crore PAT this year with a revenue of roughly 2500crores. Even at current levels of trading, it is poised to grow the revenue multifold over the next two-three years and in no time, by FY2027-28, it should be a 5000crore revenue company at the very least with close to 2500 crore PAT. With the kind of multiple expansion which generally follows in such stories, it will command the valutation a Dixon or a Trent does and the very early signs of that were witnessed this week.

This week was an indication that the PMS type, the HNIs are getting restless and are finally throwing in the towel and buying the stock. One Amit Jeswani who jumps around on TV with a lot of such fancy names gave a five minute pep talk about the virtues of the stock and how the stock will make so much money and then confessed that he bought it at 3400! That was on Tuesday.

This is the point I am trying to convey- retailers have already made 5-10 times their money in the stock and the biggies are just about to get in. FOMO in stock market is the biggest wealth creator for long term investors. These people who claim to be the greatest investors can’t embarrass themselves by admitting that they missed out on a stock which is 40x since Covid, 10x since March 2023 and up 40% in a week! So now they will fall over each others to buy some quantity and run on CNBC claiming that they have discovered BSE!

Just the way that Ramdeo Agarwal still claims to have discovered Hero and Bharti. So the thing is, BSE is most likely going to be the stock of the decade- the poster boy of the rise and rise of Indian Capital Markets- eloquently capturing the power of Indian retailers. And all these funds managers who in my mind are nothing but momentum chasers will sell their kidneys to claim that they have always been the first to discover BSE!

This is that moment when the gush starts!

Imagine the bell ringing before the flood-gates open in a dam. After some time, the flow of the water takes control of itself and everything else. This move from 3000 to 4000 in a week is that moment when BSE has joined that league of stocks which were seriously missed by the big boys.

Imagine Tesla in 2020 or Jockey in 2010 or even Bajaj Finance in 2015. Once the big money gets in, there is no looking back because all these people will redo their models to add BSE’s past performance to claim, of course falsely that their funds have always been the best performers. This is how the game is played and all I can tell you guys is that every single share of BSE is going to be worth its weight in 24 carat gold.

Let me add one more point. The float of BSE is very limited- there are only 13.5 crore shares of the stock. So once people begin to buy and hold, a smaller additional demand results in greater price movement on the upside. This was visible in Nestle, OFSS, Jockey, Eicher and so on. So every share you have and are not selling is a share less available for someone else to buy. That pushes the price up each time there is additional demand.

Now the thing is, most of these fund managers are over 1000-5000crore types. So even if they have to add 1% of their portfolio to BSE, they’ll buy close to 50 crore of BSE shares. That is roughly 12 lakh shares at this price. And when the price moves up, they are compelled to add more because relative to the market, it’s performing even better. And thus, the shares vanish from the market and the price moves in a parabolic trajectory.

If you don’t trust me, go see how a mega cap like Apple or Amazon or Nvidea over up 20-30x in two-three years. BSE is still just at $6 Billion market cap.

With the kind of PAT coming in, it won’t be a big deal if it’s $20B by the end of this decade.

So I can only say one thing- hold on to your shares, let someone else take credit on TV. It doesn’t matter to me because as long as the price moves up, I am making real money!

September Musings!

The last month and a half has been extremely kind. Portfolio recovered over 20% plus since the budget day lows and what a smart recovery BSE has shown.

Even the benchmark indices have hit record highs with Nifty scaling Mt. 25K and Sensex cruising past 82,000. So what are my views and what are we happy about today!

A lot of people have been talking about the markets having moved up a lot. I have a different view in this- a lot of times when people think that the markets have moved up, they compare it from Nifty 7500 in March 2020. They assume that we are up over 3.5x in four years and thus we are bound to falter. They conveniently forget that Nifty was 6000 in October 2008 and was still 7500 in March 2020. So in effect, zero return for 12 years! In that way, we are only up 4x jn 16 years which is worse than a poor FD rate!

So for Nifty to even deliver its annualised compounded returns of close to 14-15% over long term, it is obvious that this decade will see bountiful of returns, only as a reversion to mean. Even at 60000 Nifty in 2030, it would only be 10x in 22 years! That will only be 11% CAGR over 22 years! So by the same logic of people saying markets should fall, I’m saying markets will double and double again in the next 7-8 years and still be cheap!

Now coming back to BSE. Like I’ve said in the past, with the kind of volumes it’s generating, its revenues can easily compound at 50% plus levels and which will only mean its PE being rerated to a much higher levels and sustaining for a long, long time. It’s an at least 10x in this decade, If not more.

Now let me come to something very close to my heart! Three of my companies have finally hit the coveted milestone of ₹ 1 lakh crore market capitalisation this week- OFSS, Colgate and HDFC AMC.

All three have either been a doubler or a tripler for me and the fine rerating melted my heart away! Colgate in particular has Been the star this year, already up almost 80% without even being mentioned in any news publications!

The moral of the story is, if you do good research, stick to your companies and avoid the temptation to buy the hottest defence PSU or the latest Chemical stock or the new Zomato; you will make a lot of money! It’s important to make money, it doesn’t matter if you buy Paras defence or Colgate!

One of my friends wanted to buy Paras defence because it was going up but unfortunately went down. It all happens when you latch on to the latest fad at the last leg of a bull rally and can’t get out in time. This, happens but the best is to avoid being stuck, take a loss and redeploy capital elsewhere where you know what you have bought.

So I would urge all of you to remember the good old adage, don’t eat junk! If you can sit tightly though this mega, mega, multi year bull run, you’d do exceedingly well by the time we are in 2030 and nifty itself is around 80K then!

Stay bullish on India! Stay invested

The BSE 2.0

I’ve not been this bullish on a stock for a very long time. This is what we live for in the investing world. When what you have been silently dreaming about appears to happen in reality, on corporate announcements about the results of the quarter gone by, and then the stock moves up like you have always been borderline fantasising; you sense the sweet scent of success.

FBSE came out with its numbers two days ago and what a sensational set it was. The quarterly revenue were over ₹650 crores with PAT over ₹265 crores. That means that it was now making more in profits in a quarter than it used to make in a year until one year ago!

The Equity derivatives are now bringing home over ₹100 crores in revenue every month from near zero for the entire year! That’s close to ₹1200 crore revenue for the year, assuming zero growth whereas it’s growing every month. The star MF is clocking close to ₹50 crore revenue a quarter! So for this year; it won’t be a surprise if it does close to ₹3000 crore in revenue and over ₹1000 crores in PAT.

For a company which never did a 1000 crore revenue in its 150 years of history to go to almost 3000 crore and then onwards mean that the markets are going to finally restate the stock at a P/E it deserves. It’s growing at over 100% y-o-y and can’t be trading at 35-40 multiple but would soon be doing at least 65-70 multiple. Plus, with profits at over 1000 crores, BSE should at least be over ₹70,000 crores market cap in a year or less and that means that the stock would be at least worth ₹5,000/-. It means that on a per bonus basis, the stock would then be worth ₹15,000/-

Just wait and ponder. In 2018; it was trading at ₹700; during Covid it gone down to ₹275 and even until 2021 October; it was sub ₹800 levels. From there to where it is now; this has been the biggest story of my career and I’m sure, the next double will come much ahead of my limited understanding.

But the game has just begun. NSE is doing close to ₹2500 PAT a quarter and BSE can easily be doing that much in five years time. At 50-60x multiple, BSE should be worth close to $50B market cap or close to ₹425000 crores. That means BSE will be worth over ₹30,000/- per share at that price. So the game I’m playing is at least a ten times in five- six years time.

This time, the entire bad news which would have hurt the stocks made it correct 35% in three months. It’s still down over 20% from its April 2024 peak.

For those worried about the F&O taxation and regulations, I’ve only the example of tobacco companies to offer. ITC was India’s biggest wealth creator since 1980-2014 with all the taxes going up in tandem. Altria , the maker of Marlboro was the best stock of the past century in the USA, turning $1 into $2.65 Million between 1925-2013. Yes, it was worth a million times.

So for anyone worried about taxation should look at that and ask himself if it’s all worth it.!

Overall, I can’t even complain about the markets as the much needed shakeups are arriving regularly to wake all of us up. The Indian story is well and truly underway and my constant belief, that by the end of this decade, the Indian markets and India as a country will be truly different are intact.

PS: my other love, Tata Motors has came out with the new Curvv and am sure with the kind of numbers it’s delivering consistently, we see a double in two years!

Stay bullish on 🇮🇳, stay invested!

PS:

As I update this blog, BSE trades at ₹3825/-, over 60% from the time the original blog was written less than a month and a half ago! This move has only made me more humble and grateful and I truly am! This stock is funnily so less covered that I am always anxious when it’s in the news.

Remember, the true big, huge money is made in sitting. From the absolute covid lows of now adjusted price of ₹95, the stock is up over 40 times! Yes, 40x in 4.5 years and still we hardly give it the credit it deserves. This is what the supposedly smart money does- chase momentum. I’m proud of having owned BSE since August 2018 and having ridden it all the way!

BSE now is over ₹50k crore market capitalisation and I won’t be surprised if it goes up 8-10x from here in this decade itself!

Stay bullish, get rich!

Bulls didn’t Budge’t

This was the epitome of when whatever which could go wrong, did go wrong and then got worse. The Budget turned out to be a dose of heavy realism for the markets- higher Short Term gains tax; higher long term gains tax, higher STT on F&O- it was the recipe of a perfect disaster. And guess what happened, the markets collapsed in unison. It collapsed for a total of one hour and then, it roared back up like a phoenix.

Those of us who have been in the markets for sometime remember that fateful day in February 2018 when Arun Jaitley introduced the LTCG after a hiatus of one decade plus which led to the end of the then mega run in mid and small caps and there was a total panic in the markets which didn’t recover until after the corporate tax cuts in September 2019! One must have to have lived through that peril when the pessimism about the India story was immense. And the markets tanked and just didn’t recover. It took four years for the small and mid caps to come back to their 2017 highs, long after the Covid Period was over.

So what happened today! The taxes have been raised to an even more higher levels and the LTCG rate hike was completely out of syllabus. Everybody almost desperately wanted the F&O tax but higher LTCG and STCG- no way. It was the killer punch from the government. How the hell did markets recover?

The answer lies in two things- one, we are in the middle of a structural multi year sustained bull run which is going to rise above all walls of worries and two, this is the bottom for the market related stocks- the BSE/ Angel one types.

I’m calling it with my neck out as the absolute multi year bottom for BSE stock. you’ll not get this stock at anywhere close to 2000₹ for a very long time now. Why do I think so?

BSE is the director beneficiary of market activity as its volumes are rising since this is the place where trading happens, apart from NSE. The markets have made new lifetime highs but the price of BSE is effectively at October 2023 levels, having corrected 35% since May 2024! All the things which could go wrong, did go wrong- the SEBI tax demand which led to that famous 30% drop; news of higher F&O taxation, potential curbs by SEBI and the stock went into hiding. The poster boy of their post 2020 bull run collapsed while the markets made new highs repeatedly. This was also the time when it consistently grew its business side and achieved over 20%+ market share on a sustained basis in Q1 2025 and is on track to do over 25% in July 2024 in terms of volume in F&O. It’s cash volume is up over 50% YoY and it’s F&O volumes are rising at 10% month on month basis.

So I was convinced that the peak of the bad news will mark the end of the panic bottom and today was the absolute panic- 2105₹ post announcement of the budget which recovered to almost 2295 an hour later. It is obvious only in the hindsight but in my limited understanding of to markets, this is how bottoms are made.

The other newsmaker of the day was ITC! It’s a core holding for me and I was raising my positions all through the year and the stock is now clearly on track for at least 700+ levels. It’s the absolute best stock to own currently and I’m in love with its dividends!

Coming back to dividends, the newest member of the five digit club OFSS is still trading at 2.5% yield! It has been the fastest tripler of my career and with IT back in fashion, it won’t be a surprise if it doubles from here, at the very least!

Of course everything I say is with a huge ownership bias but anyone who has read this blog since inception knows that going back to the dark days of Covid pandemic, I was convinced that we are at the cusp of something incredible and what journey it has been! By the end of this decade, it won’t be a surprise if we go up 2-3x on index levels!

Stay bullish on India, Budgets or no budgets, the bulls won’t budge!

The Zero to One Moment

In lives of men and in nations, there aren’t very many moments which are truely historical in the sense the world is never the same again. Tomorrow, we are at the cusp of one such moment when the Indian polity, as we have known hitherto will never be the same again.

With the incumbent government winning a third term with a full majority, the Bhartiyakaran of the Indian state will be complete. We will break shackles of the left-leaning, pseudo socialist and anti Bhartiya narrative which had ruled the nation for over 80% of the post independence period.

This will be the beginning of an era when the India will be run by a system which takes prides in the Bhartiyata of our culture; which puts the safety of our nation borders first and is hell bent on retaking our rightful place at the Big Boys table on the global arena; which wants India to have the best public infrastructure, which is striving to free the country from the malaise of deep rooted inefficiencies and ofcourse, is not shy of the cultural roots of our great land.

By the time this government completes its term in 2029, half the bureaucracy at the lower to mid level would have no idea how the babus used to be the Kings in the old days of socialistic planning societies. The country would have moved past the days of power shortage, bad airports and filthy railway stations, potholed roads and a mobile connectivity only in the name for over 15 years. The nation would be a thumping Third Largest Economy, with over a Trillion dollars of Exports; the mega expressways connecting the citiess would already be operational; Bullet train would be up and running; Indian households would be running on Solar energy and the Indian consumer the toast of the world through its insatiating lust for the luxury goods.

Come tomorrow evening and we will have the political stability at the very top for the next five years wherein we can harness on the mega foundations laid down in the previous five years. The highways which are currently under construction will be completed at a faster pace and the economy which has finally moved out of its perpetual repair mode can finally take giant strides forward.

The Wait at Ayodhya took over five hundred years; Kashi and Mathura will not take that long. Our temples and public places are getting cleaner at also maintained better; The rise of jihadi element in Europe must be a wake up call for all those high on the Woke opium. India cannot afford another lost decade and I’m so happy that the Elephant’s dance has finally begun.

Today’s markets only reflected part of what is to come over the next decade. This will be and is most likely to the Indian decade like the US had in the 1980s. Our companies are growing at a fast clip and the market capitalisation will grow at an even faster clip. Our markets are already the fifth largest in terms of capitalisation and we will rigthtfully lay claim to be the second largest in another five ten years. The Indian middle class is only waking up to the equity cult. Once the markets move up and the FIIs come in, as they bloody have to with their hats in hand, the Indian markets will experience a bull run unheard of in the history. Never before in the history that a $3.5 Trillion economy growing at 7-8% a year was so underallocated by the large Global funds.

With the Chinese weights in the Emerging market indices going down, India is already close to 17% weightage which will only go up from here. Our Mutual fund industry is hardly $700Billion in size whereas Blackstone alone manages over $10 Trillion. Once you have the sovereign wealth funds lining up for a piece of action, the daily funds inflow will be close to $3-5 Billion for years to come.

I see a bull run like never before. Like Rakesh Jhunjhunwala has maintained, the mother of all bull markets is ahead of us in India and there will be a Tsunami of flows rushing inside the country. I’ve unwavering belief that our markets will triple by the time 2030 is here and most stocks selling for peanuts will be worth their weights in gold. If you’re on the right side of the India story, you will make 10x in 5 years or less.

The Bet on India is beginning to work! The amount of wealth creation which will take place in the rest of this decade will be cumulatively more than what has been made in the past 75 years put together. I can’t wait for tomorrow’s final figures, can you!